Analysis of Health insurance sector during Covid-19 in India

Introduction
Health insurance sector in India is a major contributor in non-life insurance industry and It is
also crucial from the standpoint of the insurance industry's expansion. The sector has seen
sudden spike in India due to the outbreak of Covid-19 pandemic and there is upward revision
of the premium charges. With the sudden spike and revised premium charges, the sector has
been major job creation and income since the year 2018. The pie chart below shows that the
health insurance contributes 39.87% in the Non-Life insurance gross direct premiums for the
fiscal year 2022.1

Source:- IBEF.com

Review of Literature:-
Handbook on Healthcare by the Indian Brand Equity Foundation- This report by the ibef
states about the opportunities that lies in the health care sector, what the COVID-19 effect has
done and when compared to other sectors, there is positive growth in this sector as the people
are buying more health insurance.

A comparative study of the satisfaction level of health insurance claimants of public

and private sector general insurance companies by the S. Nair has conducted a comparison of
the satisfaction levels of public and private sector general insurance applicants. The majority
of the respondents had submitted a refund claim through a third-party administrator.

1
Arjun Srinivas (2021), “The covid-19 boost to health insurance”, liveMint
Medical underwriting and rating modalities by the V. Chauhan states about the underwriting
and rating modalities in the health insurance sector.

Objective of the Study:

 To study the health insurance market during the COVID-19.
 To study the growth of the health insurance sector and what lies ahead
 To study various players in the health insurance and schemes that are launched by the
government.

Research Methodology:

This paper is based on the theoretical and secondary data, which was sourced from the
research done, online journals, books, websites, newspapers, etc.

History
India’s health insurance industry was first launched in the year 1940s, and 1950s when the
civil servants and workers were enrolled into heavy subsidized insurance programmes. In the
year 1980s, and later on due to the liberalization of the economy, opened the gates for the
private sector players in health insurance industry. Due to this development, there was
opportunity for the people having higher income to gain the access to quality care from this
private players. There was change in the lifestyles and with more level of stress and long
working hours and less exercise and dependence on the junk foods, people were getting
themselves insured. The first health policy in India was Mediclaim policies.

In India, for health insurance there are 5 main acts, that are
1) Employees State Insurance Act, 1948
2) Employees Provident Funds and Miscellaneous Provisions act, 1952,
3) Employees (Workmen's) Compensation Act, 1923,
4) Maternity Benefit Act, 1961,
5) Payment of Gratuity Act, 1972
Apart from this, to improve the awareness there were government backed insurers such as the
General Insurance Corporation of India and Insurance Regulatory and Development
Authority. Back in 2007, National Health Insurance Program 2 was launched which benefited
the workers and his/her dependents.

Since the time the health insurance was launched, in India it has been paying only for the
inpatient hospitalization and for treatments at the hospital in India. Due to the advent of
private players there was many things introduced such as family floater, critical illness, post
hospitalization care procedures3. Health insurance providers are majorly the hospitals and the
pharmacies. They provide the coverage share more than 55%.

Effect of Covid-19: Performance

With the Covid-19 outbreak spread creating havoc throughout the country and affecting so
many lives, it has been one of the challenge for the health insurance industry and at the time
same people are more prone to get health insurance and industry gets its new customers. To
gain more customers and people buying health insurance policy more there are major changes
made in the health insurance industry such as:

1) Due to pandemic, it has paved way to health insurance which covers coronavirus i.e.
Corona Rakshak and Corona Kavach policies. The need to introduce policies related to
pandemic was needed as the regular health insurance was not covering the cost of PPE kits,
mask, gloves, Covid report and medicines for it.

2)The second major change that the pandemic brought was introduction of the instalment
option for paying the premiums of health insurance. The main motive behind this move was
that due to financial setback in the country, majority of people has suffered decline in their
source of income and with the such financial crunch instalment for health insurance would
make easier for citizens to pay their health insurance premiums.

2
Shah, A.Y.C. (2017), “Analysis of health insurance sector post liberalisation in India”, UGC Thesis
3
Gupta, D. and Gupta, M.B. (2017), “Health insurance in India-Opportunities and challenges”, International
Journal of Latest Technology in Engineering, Management, page. 33-40.
3) IRDA has also bought the change in terms of telemedicine, now being included in the
medical cost. The need for this change was that due patient not being able to physically meet
the doctor, the prescription over the telephone, chat, video calls is covered under the health
policies.

4) IRDA has amended the insurance guidelines, and made mandatory for the insurance
companies to provide the decision on a claim request within 30 days.

5) With the health insurance available online, the need for physical signature is also removed
and it is replaced with the OTP sent on the insurer’s mobile number or confirmation sent
through the email. This do away with the physical signature can be availed with a sum up to 5
crore.

Apart from these changes, In the latest union budget of 2021, the government has allocated
35,000 crore for the vaccines of Covid 19. Government has also passed Healthcare
professionals bill, 2021 which aims to create body that will regulate the service standards for
healthcare professional.

Recently the Hon’ble Prime Minister Narendra Modi launch Ayushman Bharat Digital
Mission that aims to connect all the digital health solution of hospital across the country with
each other. The main aim is that it will ease of living and through digitization it will also have
other facilities like consultation, also it will be consent based where the only if the patient
gives the consent the medical practitioner would have access to their records and by
uploading all your records it is safe from getting lost.
Source:Statista.com

What Lies ahead.... .It is expected that by

the year 2022, the health insurance industry is going to grow 22% and reach at the US$ 372
billion from the US$ 110 billion back in the year 2016. To become the global healthcare hub,
the government needs to develop strategies that will strengthen the healthcare system. The
graph shows that in the year fiscal year 2018 what is used to be market size of the health
insurance sector and what it will be in the fiscal year 2030.

Vaatsalya Healthcare which is the first hospital chains that focusing in the tier II and tier III,
the government should provide more support in terms of tax relaxation so that the there is
more expansion and also allow the private sector hospital to establish in these cities, the
citizens can gain access to private care facilities.

Government should promote and spread awareness to their eSanjeevani telemedicine service
so that it will reach to citizens as it enables doctor consultations from their home. One of the
way they can spread awareness is through the developing the artificial intelligence apps
which will enable the people to talk to the doctors directly, expertise just by downloading the
app in their phones. Come up with better subsidiary to startups who are focused on
developing the AI.

Ayushman Bharat Pradhan Mantri Jay Arogya Yojana which was launched in the year 2018
by the Modi Government was launched with the motive that no one leave behind in terms of
healthcare cover up to 5 lakh. But with Covid 19, it has failed the healthcare system and its
efficiency in the recent times has remained uncertain. Also as per the date of Rohini (i.e.
Registry of Hospitals in Network of Insurance only 3% of hospitals provides the benefits of
Ayushman Bharat Scheme4. Government should come with better strategies and in
consultations with the hospital lay out the scheme in proper manner so that it benefits the
people.

4
EPW Engage (2020), “Ayushman Bharat and the False Promise of Universal Healthcare”, Engage,
There is also scope for medical tourism that can be new growth factor for India healthcare
industry. Having world-class hospitals and skilled medical professionals can make India a
destination where the NRIs and other nationals can choose India for their medical cure and
surgeries. Already Yoga, meditation and Ayurveda, allopathy are few of methods of
treatment that are attracting the foreigners up till now and with the advancement of medical
facilities5.

SDG Linkage

Development in the health insurance sector in India will also contribute to fulfill the
sustainable goal no. 8 with states about the non-life insurance with focuses on health and
decent work and economic growth. As with the insurance policies and initiatives, health
insurance market will offer the necessary range and diversity of services that support the
development goals in an inclusive way and with health insurance being the major contributor
in non-life insurance will play a major in India to achieve the SDG 8.

Conclusion
The sector in the recent times has seen tremendous growth due to people buying more health
insurance so they get insured from the deadly COVID-19 and with the Covid Rakshak and
Covid Kavach two new health policies launched it will boost the sectors growth. Apart from
this there has been various tries by the government to spread the awareness and with the
digitization it will be just an easy way to reach out to the people as it is will just one click
away by downloading the application or through the Ayushman Bharat Digital platform all
the records will be saved without getting lost. With the immediate investigation and no need
for physical signature for the claim and getting the new policy it will be easy for insurance
companies also to gain the customers. With all these things taking place and that are going to
happen with the growth in the non-life insurance, the health insurance will be major factor
which will make the India hub of medical tourism and also major contributor in achieving the
SDG 8.

5
Handbook on Healthcare Sector (2021), “Report on Healthcare by ibef”, India Brand equity foundation,